August 23, 2019

Eastland owner hopes for bank aid

An owner of Eastland Woolen Mill in Corinna said Thursday that two banks had expressed an interest in rescuing the company from its financial woes.

The company’s attorney said he had filed legal documents seeking to force BancBoston Financial Co. to release funds that would enable the company to reopen. But the company agreed Thursday night to postpone until next week court proceedings originally scheduled for Friday on that action.

The company’s 300 workers in Corinna and 50 workers at Striar Textile Mill in Orono have been out of work since last week, when Justice Donald G. Alexander of Penobscot County Superior Court signed a temporary order that froze $7.1 million in assets owned by Eastland and its affiliates, including Striar Textile.

The action came after BancBoston Financial, an affiliate of the First National Bank of Boston, charged that Eastland and related companies had failed to live up to the terms of financing agreements with the bank. According to the bank, the Eastland companies are owned and controlled by the Striar family, including Alan Striar, Steven Striar and Norman Kominsky.

The bank claimed that Eastland owed it about $5.34 million, and that the company was acting “in a manner detrimental to outside secured creditors.”

Louis H. Kornreich, attorney for the Striars, said Thursday that the bank seemed to be charging that Eastland’s owners were “storing money in a war chest to fight off creditors.” He said the charges were false and not substantiated.

“I don’t know what motivates banks today,” he said.

Kornreich said he had filed papers in Penobscot County Superior Court seeking to force the Boston bank to free some of the frozen accounts so that the mills could reopen. He initially had hoped the court would act on the request Friday. But Thursday evening he said Eastland had agreed to hold off on the action until Tuesday while it continued negotiations with two other banks.

According to Steven Striar, one of Eastland’s owners, those banks are “very interested” in helping the company and have “put proposals on the table.”

Striar was optimistic that one of these banks would assume the debt held by BancBoston Financial.

“We’re not sure until they’ve crossed the t’s and dotted the i’s,” Striar said.

The owner said the long-term outlook for the company was good. “We haven’t been here 80-plus years for nothing,” Striar said. “The last few months, we’ve already been taking orders for next year.”

Striar said he thought the owners had good rapport with company employees, many of whom faced immediate financial hardship in the wake of the shutdown.

Kornreich offered some hope for financially strapped workers. He said the Bank of Boston had agreed to release funds to pay past-due payroll. Employees may pick up their checks after 9 a.m. Friday at the two plant locations, he said.

According to the attorney, the company payroll amounts to about $100,000 a week.

Striar and Kornreich met with reporters in Bangor late Thursday afternoon. Earlier, Striar held a meeting with employees.

Two workers who attended the meeting, Carol Otis of Corinna and Nancy Wood of Dexter, said that they came away encouraged that owners were doing everything they could to reopen.

“I felt that it was all very positive,” Otis said. “I was very encouraged. I think they (the Striars) told us all they could tell us.”

Woods agreed, stating, “I was encouraged by what Steven (Striar) had to say. I think some people wished that there had been a little more information, but I think Steven told us everything that he knew. I believe that many of the workers came away with the feeling that there was hope that the mill would reopen.”

Other Eastland employees were more critical, saying that they knew no more coming out of the half-hour meeting than they knew going into it.

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